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STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. GC 210275 RO
: DISTRICT RENT OFFICE
Ocean Realty Association, DOCKET NO. ZEE 210026 RK
TENANT: Patricia Caputo
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On March 26, 1992, the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on March 5, 1992, by the
Rent Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the housing accommodations known as 2909 Ocean Avenue,
Brooklyn, New York, Apartment No. 1D, wherein the Rent Administrator
determined that an overcharge had occurred.
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the record relevant to the issue
raised by the administrative appeal.
This proceeding was originally commenced on March 10, 1986 when the
tenant filed an overcharge complaint.
In response to the complaint, the owner submitted a copy of the 1985
registration and asserted that there was no overcharge. Subsequently,
the owner submitted also copies of the 1984 registration, apartment
registration listings for 1986-1988 and a set of leases covering the
period from March 15, 1981 through June 14, 1987.
In an order issued under docket No. ZAC 210212 R on May 15, 1989, the
Administrator determined that the owner had registered the April 1,
1984 rent and further determined the owner had collected an overcharge
of $429.32 through June 14, 1987 inclusive of interest on the
In response to the tenant's request for reconsideration and based upon
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an irregularity in a vital matter (finding on reconsideration that the
owner had not established that the apartment was properly registered in
1984), the Rent Administrator ordered that the matter be reopened to
afford the owner the opportunity to prove that the subject apartment was
properly registered in 1984 and the opportunity to provide a lease
history from April 1, 1980.
In response to a notice of reopening, the owner submitted the 1984
registration with proof of service on the tenant then in occupancy and
a complete set of leases covering the period from April 1, 1980 through
June 14, 1987.
In a statement dated May 8, 1991 the tenant submitted a copy of a court
stipulation dated April 30, 1991 as well as copies of money orders and
lease renewals for the period June 15, 1987 through June 14, 1991.
Included was a lease renewal signed by the tenant for the period from
June 15, 1987 through June 14, 1987 at a rental of $523.20 per month.
This amount was reduced to $506.11 and a refund of $429.32 in the form
of a rent credit was made as a result of the Rent Administrator's May
15, 1989 order.
In response to notification of the possible imposition of treble
damages, the owner cited numerous errors in the Administrator's
calculations, including the failure to consider a lease commencing June
On March 5, 1992, the Administrator issued an Order of Modification or
Revocation determining that Order #ZAC 210121 R should be modified to
find an overcharge of $3,577.64, inclusive of treble damages and excess
In this appeal, the owner contends that the Administrator's order made
the following errors:
1) In assuming that the owner had agreed to accept a
lower than legally permissible rent in the lease
period commencing June 15, 1987, the Administrator
erred and incorrectly applied the Collingwood rule.
The owner asserts that Collingwood was inappropriate
because although it had been forced to accept the
lower amount by the tenant's refusal to execute the
renewal lease, it had reserved the right to collect
a higher lawful amount;
2) An incorrect base rent was used to calculate the
legal rent for the lease commencing June 15, 1985;
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3) Since any overcharge which may have occurred was not
willful, treble damages were not justified.
In response to the petition, the tenant contends in substance that for
the period from June 15, 1987 to June 14, 1989 the actual rent paid was
$506.11; that the owner should not have been permitted a 7.5% vacancy
allowance because the subject apartment was not vacant for a sufficient
time before she took occupancy and because the owner was warehousing
apartments; that the Administrator erred in revising the original
figures presented in the Final Notice dated January 17, 1992; and that
treble damages were warranted both in the original order and in the
order herein appealed because the overcharge was willful. The tenant
makes other contentions not pertinent to this appeal.
After careful consideration, the Commissioner believes that this
petition should be granted in part.
Review of the record reveals that the owner herein timely offered the
tenant a renewal lease, commencing June 15, 1987, which, the tenant
states, she delayed signing while awaiting resolution of her complaint
by the DHCR and the owner subsequentLy amended the rent stated in the
lease to conform to the rent established in Docket No. ZAC 210121 R at
$506.11. The record further reveals that the owner made a demand for
the rent. Accordingly, the Commissioner finds that the owner did not
waive the legal rent and that the Administrator erred in setting the
rent for the period commencing June 15, 1987 at $480 instead of $506.11.
The owner correctly charged $551.66 for the lease term beginning June
15, 1989 and $576.48 for the lease term commencing July 15, 1991.
Accordingly, the Commissioner finds that no overcharge occurred after
June 15, 1987 and revokes that part of the Order.
The Commissioner finds that the Administrator did not err in the base
rent figure used to compute the vacancy lease commencing June 15, 1985.
The owner received a guidelines increase under Rent Guidelines Board
Order #16 in the renewal of the prior tenant's last lease. An owner may
not receive more than one guidelines increase during the same guidelines
period. Hence, the Administrator based the increase on the rent in
effect on September 30, 1984 $398.56 + 16.5% = $464.32 rather than the
lawful rent in effect on March 15, 1985 - $422.47 + 16.5%. The owner's
piggy-backing error resulted in an overcharge of $429.32, inclusive of
excess security and interest on the overcharge. The record indicates
that this overcharge has been refunded to the tenant.
The Rent Stabilization Law provides for a penalty of treble damages for
willful overcharges. The statute creates a rebuttable presumption of
willfulness which the owner may overcome by proving non-willfulness by
a preponderance of the evidence.
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An overcharge caused by a hypertechnical error such as "piggy-backing"
guidelines increases within the same year, as occurred in the instant
case, is deemed to be non-willful pursuant to Policy Statement 89-2.
Accordingly, the Commissioner finds that treble damages are not
It is noted that the tenant failed to submit any documentation in
support of her allegations with respect to the 7.5% vacancy allowance
permitted to the owner. Moreover, the tenant failed to file a petition
of her own raising this issue and it cannot properly be considered in
response to the owner's petition.
If the owner has already complied with the Rent Administrator's order
and these are arrears due to the owner as a result of the instant
determination, the tenant shall be permitted to pay off the arrears in
twenty four equal monthly installments. Should the tenant vacate after
the issuance of this order or have already vacated, said arrears shall
be payable immediately.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, granted in part,
and that the Rent Administrator's order be, and the same hereby is,
modified in accordance with this order and opinion.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner